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September 1996
On-Site Cost Controls
Negotiating better prices for your exhibitors -- and for yourself
By Jenny Tesar
You want to keep show costs down, but are exposition industry supplierswilling to help you? "Yes!" agree organizers of a variety oftrade and consumer shows. In an increasingly competitive industry, they'velearned how to use their own strengths to obtain savings for themselvesand for their exhibitors.
Some negotiating points are well known. A show that wants to be in Chicagoduring the August doldrums has more negotiating power than one that wantsto be there during the hectic spring season. And a show with a lot of drayageis in a better position to negotiate deals than a show that doesn't generatethis revenue for the contractor.
Before you talk turkey, identify what you bring to the table and determineareas where you can be flexible, starting with the facilities you need.Some facilities may appear to have no need to bargain. Others will workwith you on some items but adamantly resist changes in other areas. "Thereis no norm -- each facility is unique," says Mark LoGiurato, VicePresident and General Manager, Wilton, CT-based Comtek Expositions Inc.But it never hurts to ask!
"Hotels are easier to negotiate with than convention centers thatare government entities, because you're generating rooms and food and beveragesales," says Darline Daley, CMP, Director of Meetings for the AmericanWater Works Association (AWWA) in Denver, CO. "We try to keep outof convention centers, but sometimes the size of a show makes that impossible.We're moving one show into a convention center next year. The costs forus are going up, and it's directly related to going into a center."
Cleveland-based Expositions Inc., headed by Chris Fassnacht, CEM, onlyuses privately owned facilities. "They are much more flexible thanpublicly owned buildings," Fassnacht says. Because they typicallyoffer more in-house and exclusive services, private facilities often havemore negotiating points and can put together packages that reflect justwhat your show needs.
Nitty gritty details
In every contract you sign, there is some room for savings. Scrutinizethe fine print for areas where there can be give and take. "If anothershow needs to come into the facility on top of you, negotiate for yourdismantling," says Louis Shelley, CEM, Show Director for I.B.S. Showsin North Miami Beach, FL. "Point out that you have to consider whatyour expenses are to have the decorator dismantle in a more condensed timeperiod. Or perhaps show management can negotiate 'clean hall.' If there'sa heavy industrial show prior to your show and you're going to carpet,don't require 100 percent clean. Let the facility do that after you leave."
Shelley has the facility put large trash bins on the floor during setup and dismantling, plus smaller containers specifically for paper, metalor wood. This has cut down tremendously on clean-up time and costs, hesays. It also means less danger of slips and falls -- and the medical andinsurance hassles they entail.
Fassnacht points out that show organizers do not receive any economicbenefit from food sales and asks: Why should they pay for refuse createdby these areas? He has negotiated separate dumpsters for trash from foodand concession areas.
When negotiating your general service contract, consider your exhibitors'costs. Booth packages that include space, carpeting, chairs, electricity,etc. can be most economical. According to Dave Houston, President/GeneralManager of Rosemont Exposition Services Inc. at the Rosemont (IL) ConventionCenter, "The cost to the contractor of providing one of each itemto every exhibitor is cheaper from a labor standpoint than having to addresseach exhibitor individually."
Houston also quotes drayage packages to show management on either aper-ton or square-foot basis. "We don't offer blanket packages. Eachpackage is geared to the individual show based on the needs of that show."
In some venues, exhibitors may be charged $15 or more per 100 poundsof drayage, regardless of what materials are being shipped. But Fassnachtasks, "Why should exhibitors get nailed for a round-trip rate if they'renot using round-trip service? Many of the exhibitors in one of our showsship in thousands and thousands of pounds of literature. We have been ableto structure a special rate for literature passed out at the show."
No savings is too small. Decorator packages typically include a rectangularwhite sign with the exhibitor's name and booth number. "Everyone coversthem up, so why pay $7.50 to $15 apiece for them?" asks Robert BaudouxSr., CEM, President of Monroeville, PA-based RWB Convention Management.He advises eliminating these from the package and telling exhibitors they'llreceive signs only if they request them.
During show time
Many costs are dictated by union rules, but you may be able to minimizetheir effects, especially if you have good rapport with hall management,says LoGiurato. For example, say your exhibitors need to set up on a weekendand there's work still to be done as 6 p.m. -- and double time -- approaches.The center could extend the standard rate to exhibitors for two hours,bill the excess to you, and agree not to charge you for several hours ofelectricity. Or they could release some security guards or other personnelrather than keep them on the clock into overtime. "Nine times outof ten you can work something out," says LoGiurato.
During show time, mind the details. If you ask for something, be specific;sign for it and keep a copy of the order. "Don't just tell them thatyou need coffee in a certain location," says Baudoux. "Perhapsit's a small area that only warrants a 20-gallon tank. If you're not clearon what you want, they'll bring down two 30-gallon tanks and you'll payfor it."
AWWA's Daley stresses that the service people at facilities can bevaluable partners in controlling costs. "They are very professionaland know how to maximize what we can do within their building. They arepro-active, recommending things that worked for other shows. They wantto help us get our job done and help us look good without adding extracosts."
Public show strategies
Consumer show organizers have a notoriously hard time securing facilitiesand dates. But those who have measured their impact in a community knowhow to leverage this information in a bargaining session.
"We just did an economic impact study with Exhibit Surveys on allfour major public shows here in Cleveland in the past year," saysFassnacht of Expositions Inc. "I told them I wanted something indisputableso that when I go to the bureau and say I need dates, I can demonstratewhat we're worth. Our Cleveland Sport, Travel and Outdoor Show takes over3,000 rooms during a 9-day period. This dispels the myth that public showsdo not fill hotel rooms!"
The number of out-of-town exhibitors your show brings into town arean important negotiating point, but don't overlook the potential for drawingattendees from surrounding communities as well. I.B.S. Shows has been bringingtour bus groups into town in recent years to increase daily traffic. Shelleysays the groups create new business for his show, and it's also a bargainingchip because the building can create new revenue centers, such as increasedfood sales. Multi-day tour groups mean hotels and restaurants benefit aswell.
More chips to cash in: Extending show hours from 5 p.m. to 8 p.m. meansthat attendees are going to want dinner as well as lunch. If you have ashow with a lot of turnover, you're important to the parking revenue department.If it's a selling event, the government will retrieve a percentage of thegross sales receipts.
"Most of the time the community is paying for this facility insome type of bond issue. Public shows are events that they can enjoy andthat bring home the fact that the facility is a nice place that enhancesthe community," points out Shelley. "Make good will gestures,such as having theater ticket sales or voter registration on the show floor.Media exposure is another bargaining chip: you're publicizing the facilityas you're publicizing your show."
Leverage your past
Among your strongest negotiating points are the track records of yourcompany and your show. "A company with a record of bringing in andpulling off shows successfully has more negotiating room than an unknowncompany," LoGiurato says. "There are companies who lease spaceand then cancel, leaving facilities with empty halls that could have beenrented to someone else. So a facility is not going to go out of its wayuntil you hold the first event and prove to them you are what you say youare."
What you bring to the community is a particularly useful negotiatingpoint for publicly owned facilities. "We work for the village of Rosemont,so we look at what's best for the village," says Rosemont ExpositionServices' Houston. "Several shows that come here may not be particularlygood shows for us, from a contractor revenue standpoint, but they are goodfor parking, hotels or restaurants."
The bottom line: your best negotiating points are your exhibitors andattendees. Know who they are, and take this information with you to yournext bargaining session.
Savings realized by controlling on-site costs can quickly be eatenup by billing errors. To prevent this from happening, have good operationspeople on site who know the budget you're working with and who have goodrapport with the facility. Insist on a bill before you leave the hall.And don't pay undocumented charges.
Before dismantling, go around with facility personnel and agree onthe amount of square footage. "Is the square footage really as statedor should you receive deductions for pillars and posts? Why should youpay for them if the exhibitor can't use them?" asks Louis Shelley,CEM, Show Director for I.B.S. Shows.
"Take a tape measure to perimeter drape," suggests ChrisFassnacht, CEM, President of Expositions Inc. "Double check the linealfootage of aisle carpeting. If an aisle runs through a large block exhibitbecause of fire regulations, make sure this space is deducted from totalexhibit space. This must be done during the show. Two weeks later, thatexhibit is gone, and your blueprint of the floor plan probably doesn'tshow the aisle." As Shelley says, "loss of time is loss of information."
Shelley also creates sign-in sheets for security personnel and otherworkers contracted through the facility. "We do it primarily to knowwho is on site and who to call in case of any emergency, but the sheetsalso account for hours worked."
"The most common place we find errors are in catering and hotelbills. We are charged for something that we didn't order or didn't use-- or it's someone else's bill," says Darline Daley, CMP, Directorof Meetings for the American Water Works Association To avoid this, Daleysends a function manual to the facility that lists everything being ordered.Her staff signs off on event orders. They check that rooms are set up accordingto the information they signed off on. "If there is a piece of audio-visualequipment in a room that we haven't ordered, we alert the facility rightthen; we try to stop a problem before it gets to the point of billing."
When the bills arrive, Daley's staff members review and sign off onthem. They identify discrepancies. They look for backup, or proof thatthe service was provided. "We do not pay without backup," saysDaley. "Say the bill is for $10,000. We'll send it back to the facility,tell them we're paying $9,500 but the other $500 is not ours, or if itis ours it does not get paid until we see backup."
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